Series: Adventures in First Time Home Buying «

This is the first in an on-going series of articles dedicated to helping 1st Time Home Buyers successfully achieve their purchasing goals. Each time, we’ll identify and discuss, in chronological order, key events in the home buying process.

Today’s topic: Mortgage Lending and Loan Pre-Approval

The first step in your home-buying adventure should be to find an experienced mortgage loan specialist. Before you start the home-search process, you need to know if you’re in a position to purchase a house, and at what price. A seasoned mortgage professional will be able to review your current financial status and determine if buying a house is a realistic and prudent goal for you. Sometimes, people need to pay-off some outstanding debts first, or repair a past credit problem. A qualified loan specialist can help you to formulate a game plan for working through these issues. The next step is to help you select a loan product this best suited for your specific needs. Years ago, buying a home required a  substantial cash down payment. Now days, there are many creative programs available, specifically for 1st Time Buyers, making it easier than ever to qualify for a home purchase. Once your mortagage specialist has reviewed and verified all of your financial information, and helped you to select a particular loan product, they can then determine a suggested price range to fit within your budget. This price range will serve to drive your home searching process. Many times, a loan pre-approval letter can be provided by your lender, helping to better portray you as a strong, qualified Buyer.Here are some helpful suggestions:

• Identify, interview, and evaluate at least 3 different lending sources. Obtain recommendations from your real estate agent or friends.
• Ask lots of questions. The folks at Olympic Northwest Mortgage states there are 3 key elements to finding a good loan specialist: They need to be knowledgeable and willing to take the time to educate 1st time buyers. They need to have the ability to empathize with people, understanding their individual needs and issues. And there needs to be a relational chemistry between the Buyers and their mortgage specialist.
• Use a local lender. It makes sense to work with someone who knows the nuances of your particular market and can respond quickly to any issues that may arise. It’s also easier for area agents and title/escrow offices to coordinate the transaction with local lenders.
• Don’t shop for lenders based solely on the interest rates they quote. Just because someone offers you the lowest rate doesn’t always make them the best choice.

Having a knowledgeable mortgage specialist as part of your team will help you to successfully achieve your home-buying adventure!

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This is the second installment in an on-going series of posts dedicated to helping 1^st Time Home Buyers successfully achieve their purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process. In the last post, we talked about Mortgage Lenders and Loan Pre-Approval.

Today’s topic is Top Ten Traits of a Great Real Estate Agent - Part One

One of the most satisfying aspects of my career in real estate is helping people achieve success in their home buying adventure. This is especially true with 1^st Time Home Buyers.

However, before we begin, let me first stress the importance of having a real estate agent to represent you, particularly if you are a 1^st Time Buyer. As we will discuss further, you owe it to yourself to have someone who is dedicated solely to representing your best interests. With that said, the following is a list of traits to look for when choosing your agent:

Top Ten Traits of a Good Real Estate Agent:

Advocate: You will hear a lot about real estate agency law. Professional agents take representation very seriously. The process is not about us, or our commissions, it is all about You, the Buyer. We exist solely to represent your best interests, period! Listing Agents are under contract with the Sellers. They represent the Sellers. A Buyer’s Agent owes their fiduciary or statutory duties and obligations to you and you alone. When you meet with a prospective agent, ask them to explain agency law. Ask them whom they would represent in the purchase transaction. A great agent is passionate about working for their Buyer’s best interests.

Knowledgeable: A great agent is a knowledgeable agent. They understand local, state, and Federal laws concerning real estate. They are proficient with purchase & sale contracts, and can explain all the various forms and addendums to you. They know the local market they serve intimately. And, if for some reason, they don’t have the information you need, they know where to get it quickly.

Ethical: Licensed real estate professionals are held to a very high standard, The NAR Code of Ethics. While there may be a few exceptions, most agents genuinely strive to maintain these ethical practices in their daily business. They don’t just talk about being ethical, it’s who and what they are.

Accessible: Great agents will make themselves easily accessible and available to their clients. This doesn’t necessarily mean that they have no life and you can call them 24/7 with your questions. But it does mean that they will make you feel as though you’re their only client! If they aren’t available to take your call, they’ll actually return your messages promptly and on the same day! Great agents also make good use of new technologies to provide greater accessibility for their clients.

Communicator: A great agent constantly communicates relevant information to their clients. This is especially critical for 1st Time Buyers. They can never have too much information. Your agent should provide you with good information and often.

Well, that completes Part One. Look for the remaining 5 Traits of a Great Real Estate Agent in my next post, coming soon! And then you’ll be better equipped to successfully achieve “the Next Adventure in Life!”

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This is the third installment in an on-going series of posts dedicated to helping 1^st Time Home Buyers successfully achieve their purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process. In the last post, we began to identify the Top Ten Traits of a Great Real Estate Agent. We had discussed the first 5 traits: Advocate; Knowledgeable; Ethical; Accessible; and Communicator. Here then, are the remaining 5 traits:

Top Ten Traits of a Great Real Estate Agent, Part 2

Highly Recommended: They say that you’re only as good as your last transaction. As you interview prospective agents, ask them to provide you with recent testimonials from past clients, including the client’s contact phone numbers or e-mail address. Great agents will always have lots of great clients who say great things about them!

Empathetic: A great agent is genuinely sensitive to your needs. They are patient and understanding. They recognize the emotions, fears, and anxieties that usually accompany a first-time home purchase. Their constant and confident assurances provide a much-needed anchor throughout the entire transaction.

Willing to educate: As a professional real estate agent, you can never share too much information. This is especially true with 1st Time Home Buyers. The first time you meet with your chosen agent; have them walk you through the entire home-buying transaction, step-by-step. This will help to ensure that there are no surprises along the way and you can anticipate the various events as they occur.

Tech Savvy: Great agents stay current with emerging technologies, and willingly adapt them to better improve their business and services. Does your prospective agent have a dedicated website? Is the information it contains up-to-date and relevant to your process? Does it provide you with the necessary tools to easily search for area listings?

Continuing Education: A great agent has never “arrived,” but is committed to constantly learning new things. They are consistently engaged in on-going education and training opportunities. Many top agents have earned numerous designations such as ABR (Accredited Buyers Representative), or GRI (Graduate of Realtors Institute), or CRS (Certified Residential Specialist). These designations often indicate further study, more experience, and greater degrees of knowledge.

So there’s your Top Ten Traits of a Great Real Estate Agent.

Selecting a Great Real Estate Agent is an importatnt step in successfully achieving your home buying goals. With the ever-growing amount of information that is available today on the Internet, you can learn a lot about potential agent candidates before ever meeting them face-to-face. Most real estate agents have their own website, and some regularly publish their own blogs, allowing for greater transparency regarding their work ethics, practices, and personality. 

Next time, we’ll discuss in greater detail your first meeting with your real estate agent and all the things you will need to accomplish prior to actually looking for your 1st home. The more you prepare ahead of time, the greater your chances of successfully achieving your 1st Time Home Buying Adventure!

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This is the fourth installment in an on-going series of articles dedicated to helping 1st Time Home Buyers successfully achieve their purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process.

So far in this process, you’ve selected your Mortgage Lender, determined the loan product you will use and identified the associated price range of homes to fit your budget. Then, you interviewed several candidates and have chosen a great Real Estate Agent to work on your behalf. This time, we’ll discover what to expect during the first meeting with your agent.

“Exchanging Your Vows”

One of the most important and fundamental purposes of the initial meeting with your Real Estate Agent should be to discuss and sign a Buyer’s Agency Agreement. This is a contract that accomplishes several purposes:

• It empowers Your Agent to legally represent you in the purchasing process.
• It demonstrates your commitment to your Agent and the value you place on the services they will provide.
• It equally conveys Your Agent’s commitment to you; to professionally serve your best interests; and to fulfill all the duties, obligations, and responsibilities of a licensed real estate agent.

Make sure that your agent provides you with a copy of the Buyer’s Agency Agreement and explains it completely. You may not feel comfortable signing this agreement during your very first meeting with your agent, but you should make it a goal to sign it as early on in the process as possible.

Your agent should also provide you with a copy of “The Law of Real Estate Agency.” This pamphlet will share the various relationships that can exist in a real estate transaction, and the duties/responsibilities of licensed agents are obligated to perform in each of those relationships. Here in Washington State, these duties/responsibilities are statutory in nature. They are a required by law.

Next, your agent should talk you through the entire home buying process, start to finish. Most agents utilize good visuals during this process to make the information easier to understand and digest. Be sure to ask any and all questions during this time.

Now comes the time for you to discuss your home buying wants and needs. Hopefully, you’ve had time to discuss this at length prior to this first meeting. The more detailed and specific you can be on what you want and need in a home, the better equipped your Agent will be in finding just the right home. Depending on your budget, and what is currently available on the market, you may need to pare down your wants list somewhat, and focus more on your expressed needs.

Your Agent may take time this time to show you how the Multiple Listing Service works and create a custom search just for you based on your specific requirements. With the detailed information you have provided, you can begin to identify potential properties to go tour.

During this initial meeting, be sure to share with your Agent the best methods of communicating with you during the course of the home buying process. Is it best to contact you on your cell phones? Can they call you at work? What e-mail addresses are best for sending you new listings from the MLS database? This information is especially helpful if you are an out-of-town buyer.

Now you should be ready to actually go out and look at some homes, the next exciting step in your 1st Time Home Buying Adventure!

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This is the fifth installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process.

In our last discussion, we talked about “Exchanging Your Vows” - the importance of committing to your real estate agent and entering into a Buyer’s Agency Agreement. This time I want to take a moment and discuss:

“What does it cost to buy My First Home?”

One of the questions I am commonly asked by 1st Time Buyers is, “What “out-of-pocket” expenses do I need to plan for when buying a home? That’s a really great question. There are many loan programs out there today that require very little, if any, outlay of cash. But there are a couple of instances in the home-buying process where you will need to have some amount of “hard cash” available to succeed in your purchasing goals.

Depending on what kind of loan product you are using to purchase your house, you may need to bring in money at closing to cover some of your loan expenses. In some cases, you may be able to negotiate with the Sellers for them to pay a portion of your closing costs. As we discussed previously, your Mortgage Specialist is the one who is best equipped to provide you and your real estate agent with what your estimated closing costs will be, and then together, you can develop a successful purchasing strategy based on that information.

Aside from that, there are typically two additional expenses in a real estate transaction that you will need to pay for “out-of-pocket” (hard, cold ‘cash‘) prior to closing – your earnest money and the home inspection.

EARNEST MONEY

Earnest money accomplishes a number of things:

1) It conveys the seriousness of your intention to purchase the property.

2) In some instances, it can help to demonstrate your financial ability to satisfy the contract and strengthen your position as a solid, qualified buyer.

3) It provides remedial damages for the Seller in the event that you breach the contract (backing out of the contract for a reason not stipulated in the contract)

The actual amount of earnest money will vary with each particular market. In many instances, it will represent between 1 to 2 percent of your offer price. If you are involved in a competing, multiple bid situation, an increased amount of earnest money may make the difference in you being the successful bidder. If your offer is accepted, your earnest money will be deposited into a trust account or with the escrow company, shortly after acceptance. At closing, this money is then applied to your closing costs, or, if your closing costs have been covered, it is refunded to you. What I find helpful is to explain to my Buyers that Earnest Money is money you would normally be spending anyway, and is applied to your closing costs.

HOME INSPECTION

Some of the best and wisest money you can spend in a home purchase process is for the home inspection. Cut corners anywhere else you want, but not when it comes to your home inspection. A good, knowledgeable home inspector is worth every cent you pay them. You may have a relative or friend that has construction experience, but you owe it to yourself to use the services of an experienced, certified professional.

Inspection requirements may vary from state-to-state, but most involve a complete inspection and assessment of all structural, mechanical, electrical, and plumbing systems/components. In some states, a full pest inspection is included as part of the home inspection, or is conducted and paid for separately. Additional inspections may be required, depending on the property, such as septic or well. Sometimes these additional inspections are required by contract to be paid for by the Sellers or can be negotiated into the contract.

A thorough home inspection will cost approximately $300 to $400 and will take at least 2 hours to complete, depending on the size of the home. Ask your real estate agent to provide you with a list of local inspectors. Call each one and interview them. Ask them about their level of experience, the inspection fees they charge, what those fees cover, and what kind of documented report they provide at the conclusion of their inspection. Then you will be better equipped to make an intelligent, informed choice of which inspector will work for you.

The more informed you are, the better positioned you will be to successfully achieve Your 1st Time Home Buying Adventure!

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